Managers are waste: Five organisations saying goodbye to the boss

corporate-hierarchy-hi-res

“Until there is a monumental shift in the leadership dynamic from the old fashioned command and control to a collaborative, status free, matrix way of working, then the debate about the need for an office (in the traditional sense) will be a long one.”  – Tracey Johnson commenting on Why The Death Of The Office Can’t Come Too Soon

For lots of people the traditional office – a place many go to simply to attend meetings and do emails – has become toxic.

But many readers of my recent post thought I was overstating the problem, believing if we tackled those two big time wasters it could be restored to a former grandeur.

I personally favour more radical solutions – as alluded to by Tracey in her full comment here.

Emails and meetings, together with outdated reporting and approval systems, are part of a wider hierarchical culture that is at odds with the onset of truly social business.

One of the barriers to adopting more transformational ways of working is often not the executive leadership of the organisation but the point at which it can all start to go very wrong.

The manager.

Management is the greatest inefficiency in any organisation.

Many of you will be familiar with the work of Gary Hamel – but it’s worth revisiting his examples on management waste in the context of the death of the office.

Typically a small organisation might start off simply – one manager and 10 employees. 

But as it grows it will often keep this ratio and sometimes reduce it. So an organisation with 100,000 employees will have at least 11,111 managers. Because an additional 1,111 managers will be needed to manage the managers.

And that’s before you go near management related functions whose entire function is , well , management.

It’s very easy to make yourself busy as a manager:

  • The one to ones and appraisals.
  • The team meetings and management meetings.
  • The reports you have to write and the reports you have to read that other managers have to write.
  • Authorising peoples annual leave and expenses or explaining why you won’t authorise peoples annual leave and expenses.

You could fill up 40 hours a week with just being a manager.

This multi-tiered management model piles inefficiency upon inefficiency. Decision making slows. People become less empowered.

Unsurprisingly, a number of organisations are now exploring the manager-less organisation. And it’s a trend that will only grow as social technology enables very different ways of working, both across the organisation and even across sectors.

One of the biggest has been Zappos, the online shoe and clothing store, who have adopted a system called holocracy – which replaces top-down control with a distribution of decision-making.

0711_tonyhsieh2-4Web

Here’s how Tony Hsieh  (who was CEO before they all gave up job titles) describes his vision:

“Research shows that every time the size of a city doubles, innovation or productivity per resident increases by 15 percent.
But when companies get bigger, innovation or productivity per employee generally goes down.
So we’re trying to figure out how to structure Zappos more like a city, and less like a bureaucratic corporation. In a city, people and businesses are self- organising.
We’re trying to do the same thing by switching from a normal hierarchical structure to a system which enables employees to act more like entrepreneurs and self-direct their work, instead of reporting to a manager who tells them what to do.”

Rather than by managers,  Zappos is being run via a series of self organising teams. Instead of going up the chain of command, decision-making is entrusted to groups of employees, called circles.  People can assume whatever roles they want within these circles to focus on the task in hand.

Whether it’s successful or not – it marks a shift in how large organisations are dismantling long established models to encourage greater agility and innovation.

Here are some other organisations that are worth looking at:

Valve

Valve, the video game developer , have a culture built on the premise that there are no managers, with each colleague able to choose the project he or she is working on. Don’t like the project? Fine , just get up and move to one you like. Valve also have a wonderful employee handbook which is a must-read.

Medium

Medium, the blog publishing platform, have adopted a philosophy of “No people managers. Maximum autonomy”. Adopting a form of holocracy, people can build versatile roles for themselves that speak to their whole skill sets — rather than just a single ability.  This goes against the standard , and completely wasteful , practice of recruiting for roles rather than people.

Treehouse-1

Treehouse , the online interactive education platform, have not only adopted the #NoManager philosophy but have also combined it with a four day working week. Over 90% of employees voted to adopt a manager less structure (the other 10%, presumably, were managers) with the rules of the new organisation being written by collaboration on a Google doc.

Gore

And it can be done at really large companies. At  WL Gore –  a multi-billion dollar company with 10,000 staff, people choose their own bosses – or “sponsors” as they call them.  There are “no chains of command” and instead associates communicate directly with each other.

It’s interesting to contemplate why the public sector – most of which requires far more radical transformation than the likes of Zappos – has not explored the #NoManager principle.

Social media has distributed knowledge across countless networks. On Twitter , for example, you can connect and learn from anyone. The unlikeliest people can become leaders, knowledge sharers and super-connectors.

Exactly the same thing will happen in organisations as people seek out people who inspire them rather than who manages them on a structure chart. And just like social media , you will not be able to control it.

The traditional manager , just like the traditional office, has to adapt or die.

26 Comments on “Managers are waste: Five organisations saying goodbye to the boss

  1. Challenging as ever Paul. I’m wondering how these ideas differ from the collective/ cooperative models which were common in social organisations in 1970s. Many HAs began in this way especially in London Very few existed for more than a few years as internal disputes and other issues led to their collapse. What is needed to prevent this?

    • Thanks Tom – I think that’s very perceptive. As I said on Twitter, HAs were undoubtably the startups of their day. Perhaps this is about leadership and organisational lifecycles. What Zappos are doing and what WL Gore have done (with success) is to actively maintain their original vision and roots, whilst recognising that they have to innovate against this as the organisation grows larger and more complex.

      Other organisations have perhaps put growth before remaining true to their values.

  2. Very interesting. At our performance audit patch day, Matt Wyatt from Complex Health Wales spoke about pyramid structures and how the only organisation that might have a valid reason were the army, and even then you couldn’t justify the structure during peace time! Obviously the longer the decision making chain, the longer it takes for decisions to be made. The challenge in a less hierarchical structure is to ensure that lack of direct accountability doesn’t affect the speed and nature of decision making either. But I’m sure Matt, who is a lot more clued up than me with this will be a lot more switched on with his response!

    – Dyfrig

      • Very true! Cheers for sharing that article Paul, Valve’s experience is very thought provoking. I’d love to hear more about the firings (makes me sound sadistic!), but I’d be interested to hear how they develop employee engagement around such contentious decisions

        Cheers!.

          • Oooh, I love that article. The key bit for me is that “managers started off as workers and then moved up the ladder, getting farther and farther from the front line. They gained power but slowly lost their touch with the day-to-day realities of talking to customers”.

            We’re sponsoring GovCamp Cymru, and I put a post on the LocalGov Digital Google Plus Page around what we could learn from LocalGovCamp. It was interesting to hear from someone in Australia that a key issue there was “citizen-centric services” – a key issue for us in Wales too. It’s definitely a topic I’ll take with me to the event, and it’s interesting to think about how organisational structure can play a role in either enhancing or diminishing that.

            Cheers Paul!

  3. It strikes me that the problem isn’t necessarily managers per-se, but ‘bad’ or poorly supported and developed managers. ‘Good’ managers in a progressive organisation should create this empowerment, egalitarianism and autonomy within their teams. But I still think there is a role for managers (albeit fewer than in most organisations) – what happens when the sh*t hits the fan?

  4. Very interesting topic Paul! I come from a Manager Style life growing up and in some companies, long winded, cake eatin’, CYA managers, do leave one to wonder how any success is garnered at all. I live down the street from W.L. Gore, and was waiting my last year to BSIT before applying, but as I found myself out recently, I’m there.
    I have lived here for 2 decades, spending time in many Gore employee homes, and known a few, but cannot remember any of them being complainers about their employer. Also spent some time with a sub-contractor going in and out of various Gore buildings. Always got good feelings coming away from the place!

    • Thanks Barry it’s good to hear that the Gore approach gives off that vibe. What’s impressive is the amount of time they’ve been doing it and over what is quite a complex business. Thanks for commenting

  5. Once again an interesting debate, sparked by Paul. Firstly, many thanks for your opening statement; I occasionally have these moments of wonder! ☺

    Isn’t it interesting that your blog on “Death of the office” got 128 comments and this one 14 (so far). It feels to me that we are far less comfortable talking about the dynamic of people than we are about the dynamic of space.

    I agree, to an extent, that the role of the manager is where it can sometimes go wrong. However, I strongly believe that managers behave in a way that is shaped by the role models of executives and the surrounding organisational models of processes, procedures, hierarchical structures, capacity and capability of colleagues and fundamentally the culture.

    Creating an environment where there is a matrix style of management should be relatively straightforward but it requires high levels of trust, support and collaboration; behaviours that can be in short supply, particularly for those who thrive on power as seen through status and hierarchy. But so much of what we have in place in the sector means that the shift required needs more deep rooted considerations, from the annual performance review, succession planning, talent management and reward systems – all those things that managers spend time on.

    How many in the sector still operate an incremental pay system? I hope it’s fewer than when I first joined in 2002 ☺ To support matrix working, perhaps “job families” are more appropriate? Incremental pay systems, in my view, are outdated and out of line with new ways of working/thinking. Pay systems that provide for a year on year increase, regardless of how good, bad or indifferent individuals have performed are no longer fit for purpose.

    Linked to systems of reward are performance management systems. There is the need for something, particularly around succession planning and talent management. However, I do not hold with the view about Egalitarianism. From my experience that is where so many initiatives have gone wrong particularly around performance related pay and talent management. What’s wrong with organisations identifying their high performers/high potentials to future proof and advance the organisation and the individuals? Isn’t this about being commercial? That doesn’t mean that everyone else suffers and is not supported, challenged, encouraged and developed – but just in a different way.

    What will future generations expect in the way of reward and development? I imagine it will be something quite different to what the majority of us have grown up with. I think there will be greater need for more frequent communication and feedback. Waiting for the end of year to discuss performance and allocate a rating (for some) is just not going to do it anymore.

    Which leads me on nicely to Performance Management/appraisal systems. Let’s throw them out!! Fundamentally the aim of an appraisal is to improve, coach, provide feedback, reward (financial and non-financial), support career progression and manage performance. Let’s look at alternatives – establishing a relationship where every conversation is a form of coaching; reward systems that provide for exceptional increases or lump sums for those who truly stand out as exceptional performers; create a culture where feedback is integrated into the day-to-day; create trust and respect for everyone as responsible adults; encourage everyone to take responsibility for their own needs; provide access to professional development; educate on the various ways to manage unacceptable performance. Sometimes poor performance is just a result of a poor fit into a role – adapt to matrix style of working should help.

    So…..going back to the topic of this blog “Managers are a waste: Five organisations saying goodbye to the boss” … I think we should be looking at a change in our structures, creating a culture of trust and accountability but let’s look at some of the systems in place before we start to strip everyone of their title. Personally I’m all for it – call me what you want, as long as I have accountability, freedom and trust to do what’s right for the organisation and all it’s stakeholders. ☺

    • Superb comment and I can’t add anything.

      You’ve made me wonder how many people still adopt a conventional incremental reward system. Think we should do a bit of joint research!

      The systems you describe require huge amounts of trust and a lack of ego – perhaps why they don’t exist more. I suppose we keep coming back to the C word – culture.

  6. An interesting post to which it’s easy to shout YEAH sack all managers. However what I think has been lost is the difference between a manager and management. Most things in a workplace need some form of management; someone needs to set shifts and shift patterns, ensure staff cover, deliver a project etc etc but I think we have got sucked into structures whereby it will often be the same manager making these decisions when they might not be the best person to do so. I think we need a culture that recognises the importance of management to deliver something whatever that might be and to have responsibility and accountability for it (which could be collaborative) but that management can be a shifting process involving all sorts of different people at different times.

    Running alongside this is the thorny issue of pay and recognition. In our hierarchies the way to earn more money is very often to get promoted to become a ‘manager’ even if you don’t actually want to be a manager and are actually no good at it but this is how progression and reward is recognised. How often are brilliant practitioners on the front line of public services driven to become managers as its the only way to earn a good living in that area. They often miss the front line work and are very poor managers because that contains a very different set of skills. It would, in my view, be a much better solution to enable people to become the best, most experienced and skilled worker in the field where they have an interest and passion and reward this accordingly which may, shock horror, earn more money than the ‘manager’.

    So lets concentrate on getting the right people in the right places and paying them accordingly. Let’s in effect actively manage this change process 🙂

  7. Absolutely spot on Ian and picks up themes from the previous comment by Tracey.

    Why I like the concept of ‘Circles’ or ‘Sponsors’ rather than management is it plays to peoples strengths without the need to love doing line management – which as you say , probably does need to be done in some form.

    But – as you say this can’t be looked at in isolation. The highly skilled colleague who people go to for advice , who embraces every change thrown at them and delivers time after time is a rarity but is rarely paid accordingly. Unless they embrace , yep , being a manager. It’s times to unpack this and I thank you for your perceptive comment.

  8. The key to management is to get rid of the managers.
    The key to getting work done on time is to stop wearing a watch.
    The best way to invest corporate profits is to give them to the employees.
    The purpose of work is not to make money. The purpose of work is to make the workers, whether working shifts or top executives, feel good about life.
    Ricardo Semler

  9. Ok so far as it goes … the organisation of organisations needs to be grounded in an understanding of the nature of the work of the organization; as a whole and within work groups.

    The classical hierarchical organizational chart dates back to Frederick the Great of Prussia (18th century) and F.W. Taylor (19th century). It (and layers of ‘management’ were created to control work in an environment where ‘work/activity’ took place in a relatively stable environment and where ‘science’ was believed to offer the ‘one best way’ for undertaking a particular task.

    So (arguably) there are aspects of the work of organisations where this world-view might still be valid; there are other aspects of work where this world-view are wholly dysfunctional.

    The solution is not to ‘get rid of managers’ but to understand where – to effectively undertake the work it exists to perform – an organization needs managers; where it needs facilitators and where it need animateurs.

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  12. Thank you for your blog – it is thought-provoking and challenging. I lead a team of 12 consultants, and we have been exploring The Happiness Manifesto by Henry Stewart. He talks about choosing your own manager as well. Your suggestion, as Tracey says, must mean rethinking not just performance management, but the whole recruitment and selection process as well.
    I have shared your post with the team, and we have agreed to look at what it could mean for us at our team meeting, I am up for this, and I will let you know how we get on.
    Thanks again

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